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How To Change Employment Terms & Conditions

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How To Change Employment Terms & Conditions

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I am often asked if it is possible to change contractual terms and conditions of employment. The answer is yes, but you will to need consult with employees and get them to consent to the changes.

First you need to consider if the proposed changes are contractual or a change in policy. Policy changes may be implemented without the need to obtain agreement from the employees. If the change is contractual, then agreement will be needed to implement the change. Unilateral changes are unenforceable and you would most like find yourself facing an employment tribunal claim.

There are a number of ways to achieve change:

  • Consult with the employees concerned or with employee reps.
  • Explain the proposed changes.
  • Discuss the reasons behind the change.
  • Explain what will happen if the changes do not occur.
  • Give employees the opportunity to raise their concerns and put forward their suggestions.

I would recommend a minimum of 30 days consultation but this would depend on how many employees were involved and what the changes were.

If the employees will not agree to the changes then you may have to impose the change. This should really only be used as a last resort. If the change is fundamental, it may amount to a breach of contract entitling the employees to:

  • resign and claim constructive unfair dismissal
  • make it clear that they object to the change but continue to work
  • claim breach of contract and damages for loss
  • make an unlawful deduction of wages claim, if the change results in a reduction in pay.

If an employee does not accept the changes then the original contract needs to be ended. You will need to give contractual notice and then immediately re-engage on the new terms and conditions. This is not without risk and you would need to take HR or legal advice. By bringing the contract to an end you are in effect dismissing the employees and must therefore be able to justify your decision on the basis of some other substantial reason. In assessing whether a dismissal is fair the tribunal will look for:

  • a sound business reason for the change
  • any alternatives
  • how many employees were willing to accept the change
  • the impact on the particular employees, their reasons for not agreeing to the change, and whether or not there was adequate consultation.

If the employees agree to the change, they will need to sign an agreement which outlines the new terms and confirming that they accept these terms. This should then be placed in the employees file. Any variation should be recorded in writing within one month of the change in order to comply with the Employment Rights Act 1996.

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